House Dem Apples?

The only people who believe that inflation is under control are those who have owned homes since before the recent explosion in real estate costs and who don’t drive much and eat less. That the inflation rate looks good on paper flies in the face of reality for a vast pool of voters. Incumbent politicians will always get the blame, notwithstanding these facts: oil prices are priced by a global marketplace (not us!), housing prices have skyrocketed for most of the nation due to simple supply and demand economics, interest rates are fixed by a very independent Federal Reserve (not by elected officials) and climate change is playing havoc with both insurance costs and agricultural realities. Even with significant wage increases in some arenas, nothing glares at ordinary Americans like daily costs they can see and feel. Arguing that statistically, inflation is under control, is a non-starter for so many voters.

Red state America truly loved pointing to the cost of living in California and New York as signs of failed governance. Texas boasted how Californians were moving there because of housing and other costs. Florida loved touting inexpensive housing to go along with its mild weather. Well, it seems that residential real estate costs (rents and home prices), related insurance and cost of normal services have crept into red state costs too. It now seems that those blue state cost refugees have discovered that prices aren’t so low anymore in red state paradise. The more buyers there are in a marketplace, the higher the prices. You can buy cheap in rural California or Texas, but it is in the job-center cities where the pain is growing.

Hurricanes, wildfires and coastal erosion – add sink holes if you must – along with skyrocketing electric power bills from air conditioning in the summer have made what used to be minor hidden costs more like a Mac truck slamming into your mythological world of “reasonable.” People are actually voting for anyone who claims they can fix this, even though in the red states they need look no further than their climate-change denying, spend “tax money battling woke” legislatures.

Where this is particularly salient is in states that have the possibility of voting Dem or GOP, swing states, where real estate has skyrocketed to California levels. Notably, Arizona and Nevada. Writing for the April 24th Los Angeles Times, Benjamin Oreskes explains:” Home sale prices in Clark County [Las V egas] have jumped by 50% since 2016, to about $414,000, according to an average of the middle-third of values collected by Zillow. The news for renters is no better. Zillow computed the expected price of a lease on a single-family residence, and it has jumped almost 70% during the same period, to about $1,750 a month.

“As President Biden and Donald Trump prepare to face off once again in November, the hope of owning a home is all but dead — or at least on life support — for many middle-class voters in Nevada and Arizona, battleground states. The culprits are low supply, high interest rates and population growth — driven significantly by new arrivals from California.

“Biden’s focus on the subject during a campaign swing last month is a reflection of how profound the crisis is for voters, observers say… ‘I think he realizes the magnitude of the situation,’ Steve Sisolak, a Democrat who was Nevada’s governor from 2019 to 2023, said of Biden. ‘He’s not out there to chase polls, but when you do poll people, affordability of housing is a major issue. If you’re not in the housing market right now, it’s going to be difficult to ever get into the housing market.’

“[One cash-strapped Arizona voter] said she plans ‘to hold her nose and vote for Biden,’ in part because then-President Trump’s behavior during the Jan. 6, 2021, assault on the U.S. Capitol was so ‘insulting.’ But Doreen, who asked that her last name not be used, said she probably won’t vote. There’s too much going on in her life, and voting never felt like much use, she said.

“In the northern Nevada town of Fallon, loan officer Shannon Faught said she’s ‘leaning toward voting for Trump.’ Low interest rates when he was president, at the outset of the pandemic, allowed her to buy several homes, which she uses as rental properties… Politics don’t weigh on her heavily, she said, but she’d like to see the country be run more like a business and thinks Republicans are better positioned to do that.

“‘I don’t think about the election a ton except for the fact that it’s maybe having an effect on interest rates,’ she said, though she recognizes that those rates are set by the Federal Reserve, which is independent from the administration in Washington. ‘I think about interest rates. Who knows if they’re being timed with the election?’… The Fed funds rate — a benchmark set by the Federal Reserve — is about 5.3%, a 22-year high. Inflation has dropped to about 2.5% from 7%.

“In Arizona, which Biden won by just 10,000 votes in 2020, home prices and rents have skyrocketed as well, as the unemployment rate remains lower than the national average, at 3.7%... The jump in prices, driven partially by an influx of Californians, has boosted anxiety.

“A study from the Common Sense Institute Arizona found a housing shortfall of approximately 67,000 units as of early 2024… Daniel Scarpinato, who was chief of staff to former Republican Gov. Doug Ducey, said he thinks the border will be the dominant issue among Arizona voters, but issues of affordability and the direction of the economy won’t be far behind. Arizona’s 11 electoral votes and Nevada’s six will be pivotal in a contest in which relatively few states are up for grabs.” Strange and as inaccurate as their assessment may be, there is a vast pool of voters who simply do not believe that the Biden administration does not control interest rates.

I’m Peter Dekom, and since facts have been relegated into a world where “alternative facts” have taken their place, don’t count on truth as a determinant of the 2024 election... but rising costs might.